Diversification of Islamic Financial Instruments
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(LMG), the London International Insurance Brokers’ Association (LIIBA) and TheCityUK. The
focus of the association has been more on commercial Takaful aspect, by providing support to
the work of those in the UK re/insurance markets that are transacting Islamic finance.
The potential of Takaful industry in United Kingdom is huge, as London is one of the largest
insurance markets in the world, and the leading global Centre for wholesale insurance and
reinsurance. UK has historically been the pre-eminent home of specialty underwriting capacity
and expertise. Banking on this experience and reputation, Takaful industry in UK is expected to
grow in the coming years.
3.10.5 POLICY RECOMMENDATIONS
 To further expand the industry, in our opinion a more aggressive marketing and
awareness campaign is required. With the increasing ‘Islamophobia’, the value system
prevalent in Islamic banking needs to be further highlighted. The Islamic banking
players need to think from a strategic perspective to diversify the product range they
offer currently to consumer segment. Long term sustainability can only be derived
from a strong retail banking base. Another possibility for the Islamic banks in UK is to
further diversify towards zakat and Waqf based products through financial
engineering to tap into the entrepreneurial and start-up businesses.
 UK is already one of the leaders in the innovations in Sukuk instrument, which needs
to be further built upon to offer Sukuk which contribute towards the knowledge
economy UK is moving towards. In this regard, various types of contracts based on
Murabahah, Salam, Istisna’, Musharakah, Wakalah bi al-Istihmar, and others can be
used in structuring Sukuk as in other jurisdictions to attract investors.
 The Takaful sector which lacks the most within United Kingdom, needs to build more
awareness and distribution channels which can be done on the window model by the
existing Insurance providers. Another aspect which the policy makers should focus on
for development is the micro-Takaful aspect to capture the lower segment in
Indonesian society.